Skip to main content

Seriously, It's Just a Number

Disclaimer; I’m going to address a financial subject that I find to be controversial. Here is it–the FICO score.

Huh?

It’s also referred to as a credit score. Now you get it. The fact that anyone needs to rely on one at all is up for debate, in my humble opinion, but that is not the subject of this post today. We are going to pretend for a minute that I really care about credit scores (which I don’t, and I’ll explain why) and all learn something together.

“A FICO score is a credit score created by the Fair Isaac Corporation” (thus FICO, their symbol on the New York Stock Exchange). “Lenders use borrowers’ FICO scores along with other details on borrowers’ credit reports to assess credit risk and determine whether to extend credit. FICO scores take into account data in five areas to determine creditworthiness: payment history, current level of indebtedness, types of credit used, length of credit history, and new credit accounts” (https://bit.ly/3zeBkcW).

I heard Dave Ramsey say something akin to this; the credit score grades your relationship with debt. Many companies, even ones that have no business doing so (like auto insurance companies and potential employers), in my opinion, “run your credit” to see if you are worthy of their time and attention. They don’t seem to understand that if you have zero debt and no credit accounts open, your credit score will be zero. Seeing a zero freaks them out, and they don’t know how to process it.

I could care less about my credit score because I have no intention of borrowing money from anybody ever again, not even for my next home purchase. But I digress…

Because MOST people have some form of debt and are caught up in the credit score merry-go-round, we must address the idea of credit scores. So, note to self, we should learn to care about our credit score and thus take care of our credit score. So, how do we go about it?

Check out annualcreditreport.com for reports from each of the three credit reporting companies. Make sure they are accurate. Reach out to them if they are not. Close old yet still open accounts with zero balances. Even consider freezing your credit since you are no longer relying on debt and, like me, don’t intend to borrow any more money. This will also help protect you from identity theft.

While I may not agree with the need for this rating system, I do understand that if you have one you want it to remain in good shape. So, take care of it. Rant over.

Comments

Post a Comment

Popular posts from this blog

One More–Christmas Experiences Part II

Christmas is just a week away. Hopefully you’ve checked everything off your to-do list and can spend some quality time “experiencing” Christmas gifts with your family. Because, after all, your loved ones will be far more touched by how you made them feel than they will be with what you gave them. This week, I want to share with you my sister, Carey’s, family Christmas experience. “One Christmas, when my boys, now 18, 23 and 28, were little, we gave them an experience that is still talked about now. And it’s something so easily replicated that any family can do it, and it’s not too late to do it for Christmas (even ON Christmas) this year. We drove around our neighborhood and looked at all the homes decorated for the holiday. We took note of the addresses as we numbered them. We talked about what made each ornamented yards stand out. And at the end of the night, we voted for our favorite. I had my sons help me make some of our favorite holiday desserts and, in addition to taking p...
Post a Comment
Read more

It Happens Like That

And, in what seems like the blink of an eye, Memorial Day is over, school is out (or almost out), and my favorite time of the year is here! I love summer. I love it when the sun comes up early and wakes me. I love flip flops and shorts. I like to be warm (ok, not HOT, but warm). This is when I thrive. And I think it’s an excellent time to take a vacation or road trip. That being said, I plan a long time in advance for a vacation because I won’t finance one–and I’ve taken some pretty amazing vacations! I don’t usually just take off on last-minute road trips, either, but I’m learning to be more flexible in my old age. So I have done that on occasion, too.  Now, this blog post isn’t about the last-minute drives I’ve engaged, cruises I’ve embarked, or the countries I’ve explored (being a debt-free, self-employed, budget-loving, young, empty-nester has its perks!). This post is about getting you to a point where you, too, can take vacations without stressing about paying for it late...
Post a Comment
Read more

Know Your Limits

When I was 17, I drove a 73 Nova. It used to be really easy to do things like changing taillights myself. That is no longer the case. If I tried that on my later-model vehicle (which is more like a computer than a car), I’d do more damage than good, because there are some thing you should just not do yourself. It will cost you more in the long run. That being said, there are probably some things that you usually pay someone else to do that are not getting done right now. My advice is to just be patient; depending on what it is and your skill level, it might end up costing you more to fix your mistakes. Let’s discuss some of those… Obviously, most if not all car repairs are just better done by a licensed, trained professional, including oil changes. They can also correctly dispose of used petroleum products. Depending on your tax filing status, a professional can help you avoid overpaying the IRS. I remember cutting my daughter’s hair when she was little, and I made a me...
Post a Comment
Read more